Low interest rates that resulted from the Bank of Canada's response to the global financial crisis have caused Canadian household debt to disposable income ratio to ________, causing the likelihood of a housing bubble to ________.
A)increase; increase
B)increase; decrease
C)decrease; increase
D)decrease; decrease

Question

Quizplus · Accepted Answer

The low interest rates led to increased borrowing and spending by Canadian households, which caused the household debt to disposable income ratio to increase. This increased borrowing also led to a rise in the demand for housing, which has increased the likelihood of a housing bubble forming.

Low Interest Rates That Resulted from the Bank of Canada's